RIL raises over Rs 1 trn in 6 weeks, sells 19.9% stake in Jio Platforms

With the stake sale of 1.85 per cent to Mubadala Investment Company and an additional 0.93 per cent to Silver Lake in its digital services subsidiary on Friday, Reliance Industries’ (RIL’s) fundraising in the past six weeks from foreign investors in the telecom business and the first tranche of the rights issue has surpassed the Rs 1-trillion mark.
 
In terms of equity fundraising, it is a record for a single company, and the number is also higher than what initial public offerings (IPOs) or disinvestments have ever raised in a single year. 
 
The Abu Dhabi government’s Mubadala brought in Rs 9,094 crore, while Silver Lake, which has already taken a 1.15 per cent stake, has invested a further Rs 4,546 crore in Jio Platforms.

 
RIL, India’s most valuable firm, has sold 19.9 per cent in Jio to six marquee foreign investors — Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, and Mubadala — raising Rs 92,202 crore, and Rs 13,281 crore coming as the first tranche of the rights issue, totalling Rs 1.05 trillion.
 
The Mukesh Ambani-led company plans to reduce debt with the proceeds from the stake sale. The amount raised betters the funds raised through IPOs in its best year and is much more than what the government manages in a fiscal year as part of its disinvestment programme.

The fiscal year 2017-18 was the best year for IPOs, with a cumulative fundraising of Rs 81,553 crore.  
Meanwhile, the highest the government has raised by divesting stakes in public sector companies in a fiscal year is Rs 62,883 crore during 2018-19. Ambani may not be done yet, as RIL has several other deals in the pipeline.

These include the $15-billion (Rs 1.1 trillion) stake sale in oil-to-chemicals business to Saudi Aramco; Rs 7,000-crore stake sale in fuel retailing business to BP; and also Rs 40,000-crore rights issue proceeds, which will come in two tranches next calendar. RIL's consolidated net debt stood at Rs 1.6 trillion at the end of March.

The company is aiming to bring this down to zero by the end of 2020.